The US Non-farm Payrolls report for September, released this morning, confirmed that the economy is moving onto a slower growth path. The addition of 130,000 jobs in the month fell short of market expectations. The unemployment rate held steady at 3.7 percent, while year-on-year wages growth stood at 3.7 percent. Average monthly payroll gains this year are significantly lower than in the same period of 2018.
In contrast, the Canadian jobs data was much stronger than than expected, at least at the headline level. The economy added 81,000 jobs in the month, although most of the new positions were part-time in nature. The private sector fully accounted for the job gains. In line with the trend seen since the start of the year, virtually all of the new jobs were in the service sector. This may well reflect uncertainty in the goods-producing sector resulting from the Trump trade wars.
(As an anecdotal aside. just about every restaurant and store in my own little tourist town is clamouring for workers. Considering that the tourist season is set to wind down as the cooler weather approaches, this is quite remarkable).
Over the past twelve months the economy has added 471,000 jobs, the highest figure for any twelve-month period since 2003. Just under two-thirds of the new jobs have been full-time in nature. Importantly, about four in five of the new jobs have been in the private sector, with public sector and self-employment little changed.
No doubt the Bank of Canada had advance knowledge of these numbers when it made its no-change policy decision this week. It appears that the Bank is taking little risk in declining to join in with the global monetary easing trend, at least in the short term.
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